Store suppliers 'fear speaking out'

Farmers and suppliers may have been intimidated into silence over practices in the supermarket sector, an official report has suggested.

The Competition Commission said its investigation into the grocery sector had not produced as much evidence from suppliers and farmers as might have been expected.

Concerns have been raised with the Commission that big retailers are using their size to command a better level of service and trading terms from suppliers than smaller rivals.

But the Commission's document, entitled Emerging Thinking, said suppliers were reluctant to give evidence vital to the inquiry.

The report said: "Many suppliers have been reluctant to provide us (the Commission) with details of specific instances to illustrate the general concerns that have been raised with us due to concerns of possible retaliation by grocery retailers. In the absence of more specific examples, we may find it difficult to come to any conclusion."

The Competition Commission is pledging complete anonymity and confidentiality for suppliers in a bid to encourage them to come forward.

The National Farmers' Union (NFU) welcomed the Commission's assurances. Robin Tapper, NFU senior adviser of food chain relations, said: "This proves the fact that there is a fear factor existing in the supply chain and suppliers do not want to put their head above the parapet for fear of retribution."

He added: "The reaffirmation that confidentiality will be maintained will give our members greater encouragement to come forward and I have no doubt they now will."

The Commission said it would concentrate on the grocery sector at a local level for the next leg of its investigation, focusing on whether Tesco and other supermarkets were stifling competition by creating strangleholds in local communities - the so-called "Tesco town" effect.

Inquiry chairman Peter Freeman said: "We are now going to look in greater detail at the conditions for competition within the locality of where shoppers shop to see if they're getting the benefit of competition. It may not be that Tesco is the most dominant player, but it's about getting that picture and seeing how consumers make their choices."